public health

Trump Administration reverses decision to freeze insurer payments, undermining ACA coverage

Just weeks after the Trump administration announced it would suspend a program that helps health insurers cover the costs of high-risk enrollees, the Centers for Medicare and Medicaid Services said it had adopted language that will now allow the agency to distribute more than $10 billion from a “risk adjustment” pool.

The national, nonpartisan Families USA said Wednesday it was relieved the Trump administration had reversed “its ill-conceived decision” to stop the risk adjustment payments, which help insurers cover people with pre-existing conditions.

While the risk adjustment program costs the government nothing, it is vital to the functioning of the market for people who buy coverage on their own because it facilitates the pooling of risk, keeping costs stable for consumers, including people with pre-existing conditions.

“The risk adjustment program prevents health insurance plans that happen to get a larger share of high-cost enrollees than other plans from being at a financial disadvantage. Without risk adjustment in place, plans will have a strong financial incentive to cherry-pick patients who cost less to insure and put up as many barriers as possible for people with preexisting conditions and others with high health care costs.

The New York Times explains the reversal was driven by both nervous Republicans and insurers:

If payments are not made, it said, “there is a serious risk” that insurers will substantially increase premiums in 2019 to make up for the loss. The higher premiums could make coverage unaffordable for some consumers, especially those who do not qualify for subsidies, it said.

Insurers are now deciding whether to participate in the marketplace in 2019 and setting the rates and benefits of the plans they intend to offer next year.

Republicans in Congress, afraid of being blamed in the midterm elections this year for even higher premiums, had urged the Trump administration to resume the payments to insurers.

Read the full NYT article here.

Blue Cross Blue Shield of North Carolina is expected to file its rate request for 2019 later this summer.

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